Windmills five miles south of Reardan will be generating electricity for Avista Utility customers by the end of 2011, the Spokane company announced Thursday.

The $120ƒ|million project will be a first for Avista, which has been buying wind energy from third-party suppliers for several years.

The Lincoln County windmills will have the capacity to produce 50 megawatts of power, enough for 37,500 homes. But wind variability reduces the average output of the towers to only about one-third maximum, wholesale power manager Steve Silkworth noted.

Avista’s total generating capacity is almost 1,800 megawatts; slightly more than half that comes from dams on the Clark Fork and Spokane rivers. The company’s long-range plans call for a total of 300 megawatts of wind power, additions that will be made in part to satisfy new Washington law that will require utilities to rely more on renewable energy.

The 3,200-acre location was selected because it lies within the company’s service territory and transmission lines are nearby, eliminating the expense of building new lines or paying other utilities for use of theirs, Silkworth said.

Silkworth declined to discuss wind characteristics at the site, not unusual for utility officials wary of competition. But he said twin 3,000-foot buttes, Hanning and Magnison, accelerate wind descending their eastern flanks, where the windmills will be located. Precisely where has not been determined, he said, nor has the type of windmills that will go up.

The Avista announcement coincided with its annual shareholder meeting, at which Spokane River preservationist John Osborn criticized the utility’s management of the downtown Spokane waterfalls.

Flows in the river’s north channel are cut off during low-flow periods to maximize hydroelectricity output from the company’s Upper Falls powerhouse.

Osborn said that the few megawatts generated at Upper Falls could easily be replaced from other sources but that Avista is sticking with practices that detract from the falls’ appeal as a tourist attraction.

“For Avista investors the company’s current trajectory on the Spokane River dams is troubling and illustrates a fundamental problem with corporate governance,” said Osborn, who sponsored a shareholder initiative that would require an independent director be elected chairman.

An independent chairman and board would better check management that’s not acting in the company’s best interests, he said.

Although his resolution captured just more than one-third of all shareholder votes, Osborn said the showing was respectable.

He said he was not sure whether he would resubmit the proposal.

Avista is relicensing its Spokane River dams. Spokesman Hugh Imhof said the company has agreed to increase flows at its Post Falls dam, which will put water in the north channel, just not as much as Osborn and the Sierra Club want.

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